Stadium Project

Real Salt Lake (RSL), Utah’s Major League Soccer (MLS) team, opened its new Stadium in October, 2008, in Sandy, Utah, 15 minutes from downtown Salt Lake City. Designed as a world-class sports and entertainment venue, the Stadium seats 20,000 people for various sports, including MLS games, with capacity potentially rising up to 27,000 for concerts and other events.

Rio Tinto Stadium serves as the cornerstone for surrounding development, possibly including a hotel, a broadcast studio, and other mixed-use projects such as housing, office space, and retail. However, this additional development was not included in the first phase of the project and did not receive any of the public funding earmarked for the infrastructure of the Stadium site.

The Stadium also hosts exhibition matches (e.g. RSL vs. Real Madrid or World Cup Qualifiers), youth and college sporting events, community festivals, concerts, and a range of other entertainment-oriented events.

A Private-Public Partnership

Real Salt Lake invested more than $72.5 million of private funds in the overall project, including the contribution of $7.5 million to the creation of youth soccer fields in Salt Lake County. The majority of the team’s investment went towards the actual construction costs for the Stadium itself, on top of the nearly $35 million previously invested in establishing Utah’s second “major league” sports franchise. In the 2007 session of the Utah Legislature, both the House of Representatives and the Senate passed HB 38, a bill that invests $35 million in public funds (derived from a Transient Room Tax, or TRT) to assist with land, infrastructure, parking and other needs in the stadium area. In addition to the funds allocated by the state legislature, Sandy City committed $10 million in Redevelopment Agency funds to assist with the project. Preliminary approval of the Community Development Area needed for these funds received unanimous support from the Sandy City Council.

Former Utah Governor Jon M. Huntsman Jr. championed the bill, and it passed by more than a two-thirds majority of those voting in both houses. The new law received broad bipartisan support from both Democrats and Republicans, with support from Senate President John Valentine, House Speaker Greg Curtis, Majority Leader Dave Clark, and Minority Leader Ralph Becker (now the Mayor of Salt Lake City). The bill also had the backing of former Salt Lake City Mayor Rocky Anderson, current Sandy Mayor Tom Dolan, and the Salt Lake County Council. The project received resounding support from the public when a referendum movement seeking to put the bill to a public vote fell 80,000 votes short, collecting only 14% of the 92,000 signatures necessary.

History Of Public Funding

Many other major sports facilities in Utah have received significant public support. All of the Olympic venues, Franklin Covey Field, and the E Center were almost 100% funded by taxpayer dollars. The current home of the Utah Jazz (NBA), Energy Solutions Arena (formerly the Delta Center), received $27 million of public funding in 1989 (more than $45 million in today’s dollars) via property taxes from Salt Lake City’s Redevelopment Agency for land, infrastructure, and parking. This model is essentially the same as the one used for the Rio Tinto Stadium.

Virtually every sports stadium built around the country requires some form of public investment to make the project possible. The primary reason for public investment is that private investors do not realize a return on land, roads, sewer lines, and other public infrastructure needed for these projects. Even non-sports projects, such as the Newspaper Agency Corporation’s West Valley City facility, and the Gateway shopping / office complex, enjoyed significant public support for infrastructure needs. In all cases, public investment was necessary to bring these projects to fruition.

Transient Room Tax (TRT)

The Transient Room Tax (TRT) is a tax on visitors and tourists, charged when a person stays in a Salt Lake County hotel room. Utah law mandates that these taxes be spent on tourism promotion, convention facilities, or sports and recreation facilities (Utah Code Title 17, Chapter 31, Section 2). These taxes can not be used for any other purpose. Out-of-state visitors generate 92% of these taxes, and 98% are generated by residents from outside of Salt Lake County. As such, the TRT taxes are not coming out of the pockets of County residents.

Before the passage of HB 38, which facilitates the stadium project, portions of the TRT tax were set to expire in 2011 and 2015. If they had expired, Salt Lake County would have received fewer TRT dollars. However, passing HB 38 now extends those taxes on visitors so that Salt Lake County government can use those funds on projects to benefit residents. This means that over the minimum projected life of the stadium (30 years), Salt Lake County could receive in excess of $220 million in new revenue that it would not have seen if HB 38 had not passed. This money benefits all county residents.

Sandy's Redevelopment Agency Funding

Sandy City has committed to create a "Community Development Area" (CDA) around the stadium project. This CDA allows Sandy to re-invest new property taxes generated in the area to help with the project. So, property taxes currently paid on the property in the CDA continue to go to various government agencies. However, any new property taxes generated in the CDA as the result of increased property values from the stadium project, above and beyond the base level, can be used to help the development. Essentially, this means that the tax generated by increased property values in the area could go to help the project over a set period of time. After that time, usually 15-25 years, all the taxes generated in the area go to government for public purposes.

Taxpayers In Sandy

Because the CDA can only use new “tax increment,” current property taxes cannot be used for the project. This means that anyone who is paying taxes in Sandy now will not be paying to assist the stadium project. Only new property values created in the CDA can be used. Anyone who currently pays property tax in Sandy can rest assured that his/her property taxes won’t be raised or used to pay for the stadium infrastructure.

The Land And Infrastructure

Government will own infrastructure and land paid for with public funds. So, in the highly unlikely event that Real Salt Lake were to go out of business, the state of Utah would own valuable property and assets that protect its investment.

Economic Impact

National/International Media Attention: Soccer matches played in the Stadium are routinely broadcast around the world. Likewise, news articles about the events appear in numerous newspapers, magazines, and on-line media outlets. One estimate places the dollar value of this exposure for the state of Utah at approximately $95 million per year.

Out-of-State Visitors: Real Salt Lake has been the catalyst for the two greatest international events in Utah since the 2002 Olympic Winter Games.

The Real Madrid exhibition in August 2006 sold 45,000 tickets across 48 states and 13 countries, with an estimated economic impact of $15 million coming from out-of-state visitors.

In June of 2005, the USA World Cup Qualifier against Costa Rica attracted 42,500 fans in similar fashion with a $12.8 million economic impact from visitors outside of Utah.

These two events alone have brought nearly $28 million to the Utah economy. With at least one such event per year, the dollars brought to Utah over the life of the stadium will be significant.

Out-of-State Investment: In addition to the direct economic impact of the stadium, the project will be magnet for as much as $500 million in out-of-state investment to develop the area around the stadium, including a hotel, a broadcast studio, and mixedused development with housing, offices and retail stores.

Property Values: Evidence from around the country indicates that stadiums have a positive impact on real estate values. Often, but not always, new stadiums spur economic development in the vicinity. Higher property values bring economic security to residents and more tax dollars to government to provide services to its constituents.

AT&T Park in San Francisco had a significant effect on property values in the area – with condo prices 15-44% greater than units around the city, and rental prices averaging a 1%-10.8% difference. Commercial real estate prices increased from $1.50 - $2.00 per square foot to $3.00-$400. (Bay Area Economics Study prepared for the San Jose Redevelopment Agency, November 2006)

Denver’s "LoDo" (the lower downtown neighborhood) near Coors Field has a 6% vacancy rate versus Denver's overall metro rate of 14.9% There has been over $1 billion in residential development since 1999 in downtown St. Louis near the new Busch Stadium. In addition, there is a 63% population growth rate projected in the area surrounding the Cardinals’ new home.

New Jobs: According to the Economic Development Corporation of Utah, more than 100 well-paying jobs are directly plugged into the Utah economy stemming from the day-to-day operations of Real Salt Lake Stadium. EDCU also predicts the stadium will generate 75 additional jobs within local businesses. Construction of Rio Tinto Stadium created upwards of 300 jobs for people within the Sandy community and the Greater Salt Lake area. Construction of Pizza Hut Park in Frisco, Texas created more than 500 full-time positions. Downtown St. Louis has added over 80 high quality independent retail, restaurants, and galleries in the past 4 years alone, creating a variety of new jobs for area residents.

Community Impact

Unity and Community Building: Soccer, universally recognized as the world’s most popular sport, has demonstrated a capability of unifying Utah’s diverse population behind a common passion. Indeed, it provides a family-friendly atmosphere that will allow for clean entertainment and also a place where a community can come together and take pride in hosting a successful major league franchise. With the introduction of the Stadium, fans enjoy an enhanced soccer experience on a field that is designed for the sport. The Stadium also serves as a venue for year-round events, of all sizes and with limitless themes.

Utah's Reputation as a World-Class Destination: As demonstrated with the Olympics, sports contain the power to enhance and reinforce a community’s national and international reputation. By bringing in world-renowned performers and international sporting icons on tour, as well as the out-of-town journalists, coaches, players, and fans that follow, the Stadium showcases Utah’s reputation as a world-class place to live, work and play, while at the same time augment Utah’s business and tourism industries.

Charitable Giving: As a part of the Stadium agreement, Real Salt Lake has distributes 500 tickets to each home game to underprivileged children free of charge. RSL will also continue its support of more than 12 different charities throughout Utah, primarily those under the United Way of Salt Lake umbrella.

New Revenues for Education: The Stadium itself will generate $24 million over the next 30 years in new property tax revenues exclusively for the Canyons School District. The surrounding developments could bring as much as $130 million to the District over 30 years.

Continued Revenue Stream: Due to a reversal of the proposed “sunsets” in 2011 and 2015 of a portion of the Transient Room Tax in order to provide infrastructure for the stadium project, tourists will continue to pay taxes that fund projects in Salt Lake County. Without this tax extension, the county would have lost as much as $220 million over the next 30 years.

Better Public Infrastructure: The infrastructure paid for by public funds has broad benefits beyond the Stadium. For example, the stadium will provide much needed parking for the South Towne Expo Center, which is adjacent to the stadium block.